As e-commerce is projected to increase by billions of dollars each year, It is not a surprise many brands are having to rethink their packaging in order to keep up with the demands of e-commerce. But what does that really mean for packaging designers and brands alike? It actually means a lot more than a simple design change, many brands are shifting entire business strategies and even product designs and materials just to gain a profitable foothold in the complex world of e-commerce.

Understanding packaging in regards to e-commerce is a balancing act of packaging design, material cost, security, and shipping costs. You can think of these factors as interdependent, as one will not change without affecting the other in some way.

At first thought, most would assume that an increase in e-commerce would relieve a lot of the retail packaging design pressures. This is not the case though, in fact, most consumers who search for products online still choose purchase in store if the option is available. This has forced brands to come up with a solution that is both retail optimized and e-commerce optimized. Traditional retail packaging has been around for years and is known as a powerful marketing tool that can drive purchases with the packaging alone. This makes sense as a consumer has likely already chosen to purchase if they are in the store, they are just weighing the options that are presented to them in the store at the time. E-commerce is largely based on the exact needs of the consumer and not the sheer convenience of immediate satisfaction that an in-store purchase provides. Because of this, online product descriptions are very thorough and clear, in order to suit the customers' exact needs.

The design of the packaging for e-commerce packaging predominantly focuses on unboxing experience of the product. Well designed unboxing experiences have been shown to increase brand perception and decrease product remorse and even validate higher price points in some instances. Unboxings have even made their way all the way back to mid-funnel marketing through influencer marketing and youtube reviews. For this reason, brands are designing packaging experiences that are shareable to take advantage of this emerging trend. Many are calling the unboxing the new “retail packaging” due to the growth of online retailers like Amazon, where seamless and easy returns are the expectation. This type of shopping has forced a lot of liability onto brands being that returns can be a major pain point for an e-commerce sales channel.

This unboxing experience is one of the major drivers for brands opting into using more premium packaging solutions like rigid boxes that have endless options for luxury embellishments. With these luxury elements also comes an increase in the cost of packaging. Most brands would love to implement luxury elements in their packaging but most of the time we only see these luxury elements high ticket items where healthy sales margin allow room for high-end packaging.

Another packaging change that must be considered is the security and structure of the product during the shipping process. Once a product is bought online it typically leaves the sellers protection as it then handled by a courier service like UPS or FedEx for the rest of its journey to the consumer. During this period the product can become damaged which can increase the probability of a returned product. This problem is the reason shipper boxes have become so popular. Shipper boxes traditionally are a cheaper corrugated box that snugly around the actual packaging that can or cannot be branded. This adds an additional layer of protection for the products as well as protecting the messaging and branding on the packaging itself.

E-commerce has also driven a shift towards more efficient packaging. Before e-commerce, large quantities of products were all shipped to a retailer where they were then bought by a consumer. This large quantity model allowed for a relatively low cost per unit shipped. E-Commerce operates on a drastically different model where the product is shipped directly to the customer resulting in higher shipping cost per unit. Being that most online retailers offer free shipping, it really is up to the company to create packaging that is efficient and does not incur a ridiculous shipping cost. Additionally, if the product has a high return rate it can add to the shipping compiled shipping costs. This is a challenge for brands with larger products, forcing them to think about creative solutions to reducing the volume of their packaging.

Overall e-commerce has forced packaging agencies and companies alike to rethink how the consumer interacts with packaging. It is important to understand that although retail and e-commerce have very different ways of interacting with consumers, the goal of the packaging is ultimately the same. Being that most brands cannot afford separate versions of packaging for retail and e-commerce they must really dissect their own sales channels and decide what factors are important for the success of their products in both retail and e-commerce.